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Information for Status Indians
We want you to be aware of tax benefits and requirements that apply to you as an Indian under the Canadian Indian Act. On these pages, you will find general information on income tax, the goods and services tax/harmonized sales tax (GST/HST) and excise tax. There may be exceptions to the information we have provided here, and we have not dealt with all situations.
Note
We recognize that many First Nations people in Canada prefer not to describe themselves as Indians. However, we use the term Indian because it has a legal meaning in the Indian Act.
Table of contents
- Overview
- Tax exemption
- Employment income
- Employment-related income
- Business income
- Interest and investment income
- Other income
- Corporations and trusts
- Benefit programs
- Employer source deductions
- Federal excise duty and tax
- Goods and services tax/Harmonized sales tax (GST/HST)
- Glossary
Overview
As an Indian, you are subject to the same tax rules as other Canadian residents unless your income is eligible for the tax exemption under section 87 of the Indian Act. That exemption applies to the income of an Indian that is earned on a reserve or that is considered to be earned on a reserve, as well as to goods bought on, or delivered to, a reserve.
Benoit legal decision
On June 11, 2003, the Federal Court of Appeal ruled that Treaty 8 does not provide a general tax exemption.
Refer to the Federal Court of Appeal reasons for judgment in the Benoit case.
Mr. Benoit and the Treaty 8 plaintiffs subsequently filed an application for leave to appeal the decision to the Supreme Court of Canada. On April 29, 2004, the Supreme Court of Canada dismissed the application for leave to appeal. The Court of Appeal’s decision is now valid and binding.
While it is now clear that Treaty 8 Indians are not entitled to a general tax exemption, if the property of a Treaty 8 Indian is situated on a reserve, it continues to be eligible for the tax exemption under section 87 of the Indian Act.
Self-governing agreements
If you are a member of a First Nations group that has negotiated a self-governing or tax agreement with the Government of Canada, the information on these pages may not apply to you. To find out, contact your First Nations government.
For more information
If you have questions, call us toll free at 1-800-959-8281.
Tax exemption
If you have personal property-including income-situated on a reserve, that property is exempt from tax under section 87 of the Indian Act. Contact your local band office to find out if a tract of land is a reserve for purposes of this exemption. If your band is not certain about the status of the land, contact Indian and Northern Affairs Canada.
Facts
- A tax exemption for Indian property situated on reserves has existed since before Confederation.
- The Supreme Court of Canada has stated that this exemption is linked to the protection of reserve land and property.
- The Court has concluded that the purpose of the exemption is to make sure tax does not erode the use of Indian property on reserves.
- The Court has indicated that this tax exemption is not intended to remedy the economically disadvantaged position of Aboriginal people in Canada or bring economic benefits to them.
Also, based on Supreme Court decisions, Indian property not situated on a reserve will generally be subject to tax just like property held by other Canadians.
Employment income
Employment income is exempt from income tax under paragraph 81(1)(a) of the Income Tax Act and section 87 of the Indian Act only if the income is situated on a reserve. If your employment income is exempt from tax, you do not have to include that income when you file your personal income tax return. If you live in a province that provides child and family benefits which are based on family income, it may be to your advantage to report your exempt income when you file your personal income tax return in order to maximize your provincial benefit entitlements. To ensure that you retain tax-exempt status in respect of the reported amounts, you should contact us toll free at 1-800-959-8281 for instructions on how to report the amounts.
In 1992, the Supreme Court of Canada decided that all factors connecting income to a reserve must be examined in determining whether or not the income is situated on the reserve. To determine whether employment income is situated on a reserve, the courts follow the approach described in the decision called Glenn Williams v. Canada.
The Indian Act Exemption for Employment Income Guidelines will help you determine whether your employment income is considered to be situated on a reserve. The guidelines are an administrative tool and only deal with the most common employment situations. In some situations, unusual factors result in employment income being treated differently than the way the guidelines describe. In such cases, any factors connecting the income to a reserve must be analysed in accordance with the various court decisions to determine if the tax-exemption applies. If you need help, call us toll free at 1-800-959-8281.
Expenses such as union dues and registered pension plan contributions are deducted from the specific source of employment income that they relate to. The net amount of this employment income will be exempt from taxes if the employment income is considered to be situated on a reserve. Any expenses that relate to employment income that is tax-exempt cannot be claimed as deductions against other taxable sources of employment income.
Note
A number of issues relating to the taxation of employment income are currently before the courts. A recent court decision dealing with tax-planning arrangements using section 87 of the Indian Act is the Shilling Case. The information provided here reflects the CRA's current positions.
Employment-related income
Employment Insurance benefits, Canada Pension Plan payments, Quebec Pension Plan payments, registered pension plan benefits, retiring allowances, and wage-loss replacement plan benefits you receive are treated in the same way as the employment income that gave rise to the particular income. In other words, if your employment income is exempt from income tax under section 87 of the Indian Act, your employment-related income will also be exempt. If part of your employment income is exempt, any employment-related income arising from that exempt income will also be exempt from income tax.
Business income
Your business income is generally exempt from tax if the actual income-earning activities of the business take place on a reserve. If your business is operated entirely on a reserve, your business income is connected to a reserve and is exempt under section 87 of the Indian Act. If your business activities are mostly carried on off a reserve, your business income is taxable because the exemption under section 87 does not apply.
Determining whether your business income is taxable is based on the factors that connect income to a reserve. The courts have indicated that the most significant connecting factor is the location where your business carries on its revenue-generating activities. If your actual income-earning activities take place on a reserve, the location of your customers is also an important factor. Other connecting factors, which are less important, are listed below.
- whether or not you live on a reserve
- whether you maintain an office on a reserve or take business orders from a location on a reserve
- whether your books and records are kept on a reserve
- whether your administrative, clerical, or accounting activities take place on a reserve
Example 1
John is a self-employed Indian logger who lives on a reserve. He cuts timber on land off the reserve and sells it off the reserve. John's income from this business is considered to be taxable, because his income-earning activities and customers are off the reserve.
Example 2
Delia is an Indian who owns a retail store on a reserve. The store sells goods to both Indian and non-Indian customers. Since Delia's business activities take place on a reserve, her income from this business is tax-exempt.
Note
All of the connecting factors have to be considered when determining whether or not business income is connected to a reserve. If you need help, call us toll free at 1-800-959-5525.
Prorating business income and expenses
If some of your revenue-generating activities take place on a reserve and the rest off a reserve, the tax exemption under section 87 of the Indian Act may be prorated. Part of your income will therefore be taxable, and part will be exempt from tax. In such a case, your business expenses will generally be allocated to the taxable part of your income in the same ratio, unless another allocation can be shown to be more reasonable.
Example
Arnold is an Indian who works as a self-employed plumber. Arnold lives off a reserve, and operates out of an office that is located off a reserve. He earns 60% of his revenue from providing plumbing services for customers who live on a nearby reserve. As a result, 60% of Arnold's plumbing income is tax-exempt, since the income-earning activities take place on a reserve. Arnold can deduct 40% of his business expenses from the 40% of his plumbing income that is subject to tax, unless the facts indicate that it would be more reasonable to allocate his revenue and expenses differently.
If you are a member of a partnership, your partnership income will be taxed in the same way as any other business income. For purposes of section 87 of the Indian Act, the key factor will be the location of the partnership's income-earning activities.
Under the Income Tax Act, partnership income is first calculated as if the partnership were a separate person. Your share of the partnership income from each source will be allocated to you, and will retain its characteristics as to source and nature.
If all the partnership's income-earning activities are carried out on a reserve, all your income from the partnership will be exempt from tax. If one-half of the partnership's income-earning activities are carried out on a reserve, one-half of your share of the partnership income will be exempt.
If you carry on a commercial fishing business, your income from that business is treated the same as any other business income. In determining whether your commercial fishing business income is connected to a reserve, the most important factor is the location of your revenue-generating activities-where you catch the fish.
Your income from a commercial fishing business is generally exempt from tax if the actual fishing activities of your business take place in water located within a reserve. If your fishing activities take place off a reserve, your fishing income will not qualify for the exemption under section 87 of the Indian Act. In general, business income from fishing in waters off a reserve is taxable.
To qualify for the tax exemption, you have to show that your commercial fishing activities take place in water that is located within a reserve. In most cases, reserve boundaries do not extend into adjacent bodies of water, so it is likely that your commercial fishing income will not be exempt from tax. Coastal reserves do not usually extend into the ocean; however, there may be extraordinary situations where your fishing income from ocean waters next to a coastal reserve may be exempt from tax.
Your revenue-generating activities from commercial fishing may include preparing the fish for market (e.g., filleting, shelling, icing, canning, freezing, smoking, salting, cooking, and pickling). If this type of processing takes place on a reserve, part of your business income may be exempt, depending on the extent and complexity of the processing done. The allocation of income between off-reserve fishing activities and on-reserve fish-processing activities is determined on a case-by-case basis and should be reasonable in the circumstances. Since your main revenue-generating activity is catching fish, the exemption, if any, would usually apply only to that portion of your fishing income that specifically relates to the value-added processing activities that are conducted on a reserve. Your business expenses are generally allocated in the same proportion as your revenues, unless another allocation is more reasonable in the circumstances.
Note
We will treat the income of an employee of your commercial fishing business according to the Indian Act Exemption for Employment Income Guidelines.
Example
Grant is a self-employed Indian who lives on a reserve and operates an unincorporated fishing business. He keeps his boat and equipment on the reserve. He earns his income from fishing in the ocean near the reserve and in more distant waters. Grant's fishing income is taxable, because the primary income-earning activity-fishing-takes place off a reserve. The reserve boundaries do not extend into the ocean.
However, the Indian Act tax exemption may apply to the income generated from on-reserve, value-added fish-processing activities that are directly related to his fishing business. These processing activities would include filleting, shelling, icing, canning, freezing, smoking, salting, cooking, and pickling. Grant has to show a reasonable method for allocating his income between off-reserve fishing activities and on-reserve, value-added fish-processing activities. He cannot deduct expenses that relate to the exempt part of his fishing income when calculating his taxable income.
If you earn farming income, your income from that business is treated the same as any other business income. If your farming activities take place on a reserve, your farming income is generally tax-exempt. If your farming activities take place mainly off a reserve, you have to pay tax on your farming income.
If you are a grain, vegetable, or fruit farmer, the location of the land where your crops are grown or harvested is the most important factor in connecting your income to a reserve. If you are a cattle rancher, the location of your rangeland is the most important connecting factor. If you are involved in other types of farming, the location of your farmland may vary in importance, depending on the nature of your business and the facts of your case. For instance, if your income is from a dairy operation, the location of your milking activities is likely more important than the location of your pastures or hayfields.
If some of your revenue-generating activities from farming take place on a reserve and the rest off a reserve, the exemption may be prorated. Part of your income will therefore be taxable, and part will be exempt from tax. In such a case, your business expenses will generally be allocated to the taxable part of your income in the same ratio, unless another allocation is more reasonable.
Note
We treat the income of an employee of your farming business according to the Indian Act Exemption for Employment Income Guidelines.
Interest and investment income
If your investment income is generated only on a reserve, it is exempt from tax under section 87 of the Indian Act. If the investment activities that produce your interest or investment income are located off a reserve, section 87 does not apply. The fact that you invested exempt employment or business income, or bought investments through an on-reserve branch of a bank, does not mean that the interest and investment income are located on a reserve.
You have to look at the income-earning activities that produce the interest or investment income to determine whether or not you qualify for the exemption. If the income-earning activities of the investment are on a reserve, the income is exempt from taxes. For example, Canada Savings Bond (CSB) interest is not exempt under section 87, even if savings from exempt, on-reserve employment income were used to buy the CSB from an on-reserve branch of a bank.
Example
Brent saved money from his tax-exempt employment on a reserve and, through a bank branch located on the reserve, bought units of a mutual fund that invests in government bonds and businesses located throughout Canada. Brent's income from the mutual fund is taxable, because the income is generated off a reserve.
Dividend income
If you are a shareholder of a corporation that operates only on a reserve, any dividends you receive from the corporation will be eligible for the tax exemption under section 87 of the Indian Act. This applies when the head office, management, and principal income-generating activities of the corporation that pays your dividends are situated on a reserve.
Rental income and other income from property
If you earn income on a reserve from your reserve property, your income will be exempt under section 87 of the Indian Act. For example, if you rent out a home located on a reserve, your rental income will be exempt from tax. Generally, your income from rental property will not be taxed if the physical location of the property is on a reserve.
If you own moveable property that you store on a reserve and you rent it to someone off the reserve for use off the reserve, your rental income will be considered to be off-reserve and will be taxable. Generally, we only consider rental income to be exempt when it comes from renting out rights to occupy or use real property located on a reserve. In any other case, we would have to review all of the connecting factors.
Royalty income
The source of royalty income corresponds to the location where the underlying right is exploited or can be enforced. If you receive royalty income from an on-reserve source, your royalty income is exempt from tax.
Other income
Registered retirement savings plan (RRSP) income
If you earn exempt income only and you have contributed to an RRSP, you cannot deduct your contributions on your tax return. By the same token, any withdrawals of your original RRSP contributions will not be taxable. However, since your exempt income did not create any RRSP contribution room, you will have to pay a penalty under Part X.1 of the Income Tax Act for your non-deductible contributions to your RRSP. Any investment earnings you withdraw from the RRSP will be taxed in the same way as interest and investment income.
If you earn taxable income and contribute to an RRSP, the normal rules on claiming RRSP deductions apply to you (i.e., contributions will be deductible within the allowable limits based on earned income, and all withdrawals will be taxable).
Old Age Security (OAS) benefits
If you receive OAS payments, including the Guaranteed Income Supplement (GIS), the amounts you receive are not eligible for the tax exemption under section 87 of the Indian Act. Since OAS and GIS payments are not related to any previous employment and are not considered to have any connection to a reserve, the payments are considered to be off-reserve. The fact that you live on a reserve is not significant enough to connect the income to a reserve. Therefore, normal rules apply to these payments.
United States (U.S.) Social Security benefits
If you receive U.S. Social Security benefits, the benefits do not qualify for the exemption under section 87 of the Indian Act, even if you live on a reserve in Canada.
Pension income from the U.S.
If you receive pension income from U.S. sources, your U.S. pension does not qualify for the exemption under section 87 of the Indian Act, even if you live on a reserve in Canada. Your pension income from a U.S. source and the employment that gave rise to the pension are not connected to a reserve in Canada.
Education allowances and scholarships 
You may receive a post-secondary education payment such as a scholarship or bursary through your First Nation or possibly directly from Indian and Northern Affairs Canada (INAC). The CRA has had a longstanding position that such amounts, when received by a Status Indian, are tax-exempt.
The Government of Canada is conducting a general review of Aboriginal policies, including post-secondary education assistance for Aboriginal students. Given the current lack of clarity around the legal and policy framework for this assistance, the CRA will continue to treat this assistance as tax-exempt. There will be no requirement to issue T4A slips for these amounts.
Status Indian students who receive post-secondary scholarships or bursaries from sources other than an INAC program are treated in the same manner as every other student. For general tax information relevant to students, see our Students page.
Training allowances
Any training allowances you receive under the Employment Insurance Act or a general Government of Canada training program will be taxable, unless the training takes place on a reserve. In this case, the exemption under section 87 of the Indian Act may apply. Since each case is different, call us at
1-800-959-8281 to find out whether you should include your training allowances in your income.
Capital gains
If you disposed of property that was located on a reserve, your gain from the sale or disposition of the property is not taxable. However, if your gain is from the sale or disposition of business assets that were used to generate both exempt and non-exempt income, we consider it reasonable to prorate the exemption accordingly. Even if your gain from the sale or disposition of property may not be taxable, you have to file an income tax return. The Income Tax Act requires all individuals that dispose of capital property to file an income tax return.
Support payments
If you live on a reserve and receive support payments (for you as a spouse or common-law partner, or for a child), the payments will be exempt under section 87 of the Indian Act. If you do not live on a reserve, you may have to include such support payments in your income. For more information, call us toll free at 1-800-959-8281.
Corporations and trusts
Section 87 of the Indian Act does not apply to corporations or trusts, even if they are owned or controlled by an Indian. A corporation or trust is treated as a separate taxpayer. As such, neither would be considered an Indian for purposes of the exemption.
Trust income
Income earned by a trust is taxable. However, the trust can deduct the amounts paid or payable to its beneficiaries in the year in calculating its taxable income. The amount the trust deducts has to be included in the income of the particular beneficiaries who received a payment or who are entitled to receive a payment from the trust.
If a trust has claimed a deduction for amounts that were paid or payable to you, you have to include these amounts in your income, unless the connecting factors indicate that the trust income is located on a reserve. The primary connecting factor is the source of the trust's income, which might be business income and/or investment income depending on the particular trust involved.
Benefit programs
The Canada Child Tax Benefit (CCTB) and the GST/HST credit are two programs delivered under the Income Tax Act. The CCTB is a tax-free monthly payment made to eligible families to help them with the cost of raising children under age 18. In order to receive the CCTB, you have to apply for it and you have to file an income tax and benefit return. The GST/HST credit is a tax-free quarterly payment that helps individuals and families with low and modest incomes offset all or part of the GST or HST that they pay. In order to receive the GST/HST credit, you have to file an income tax and benefit return, and tick the "Yes" box on page one of the return. By applying for the CCTB and GST/HST credit, you may also be eligible to receive related provincial or territorial benefits and credits.
Indians are entitled to apply for these benefits, which are based in part on net family income. Indians who live in Saskatchewan, Manitoba, Alberta, or Quebec can use Form T1S-D, Credit and Benefit Return. This form is available at tax services offices in those provinces. Residents of all other provinces should apply using their personal (T1) tax return. To apply for the CCTB, you also have to complete Form RC66, Canada Child Tax Benefit Application.
For more information
If you have questions, call us toll free at 1-800-387-1193.
Employer source deductions
Tax deductions at source
For general information, see Payroll. Income tax deductions at source do not apply to income that is exempt under section 87 of the Indian Act. Where it is established that employment income paid to an Indian is exempt from tax, the employee can ask his or her employer to waive the tax deductions at source. Form TD1-IN, Determination of Exemption of an Indian's Employment Income, will help employers determine the appropriate tax treatment for employees. You can get a copy of this form by completing the Online order form. Where employers determine that an Indian's employment income is exempt under section 87 of the Indian Act and they grant the waiver requested by the employee, the employers have to keep a completed copy of Form TD1-IN for each of these employees, in case we ask them to see the forms later.
If you need help, call us toll free at 1-800-959-5525.
Canada Pension Plan (CPP) contributions
Income from employment or self-employment (a business) that is exempt from tax under section 87 of the Indian Act is also exempt from CPP contributions. However, an employer can elect to participate in the CPP. See Form CPT 124, Application for Coverage of Employment of an Indian in Canada under the Canada Pension Plan. If an employer has chosen not to cover the employment under the CPP, an employee can elect to participate in the CPP by filing Form CPT 20, Election to Pay Canada Pension Plan Contributions. For information about the Quebec Pension Plan, contact the Ministère de Revenue de Quebec.
Employment Insurance (EI) premiums
EI premiums are not taxes and are not exempt under section 87 of the Indian Act. Accordingly, tax-exempt salary or wages paid to an Indian employee are subject to EI premiums. As noted earlier, EI benefits received by an Indian are not taxable if the benefits relate to employment that was exempt under section 87.
Reporting exempt income
Employers have to report on a T4 slip employment income that is exempt under section 87 of the Indian Act. On the slip, an employer will enter code "71" in the area called "Other information." However, the employee does not have to report the exempt employment income on his or her income tax and benefit return. Pensionable earnings must be reported in Box 26 of the T4 slip if an employer has elected to cover exempt employment income of a Status Indian under the Canada Pension Plan.
Federal excise tax and duty
Federal excise tax and duty apply to tobacco, alcohol, gasoline, jewellery, and other products under the Excise Act and the Excise Tax Act. The manufacturer or distributor, not the consumer, pays these indirect taxes. These excise duties and taxes will also apply to importations of the products above that exceed a travellers exemption amounts. Although the tax may be passed on to you by being included in a price, the courts have confirmed that there is no exemption from such an indirect tax for Indians.
Example
Marc is an Indian who buys gasoline and cigarettes from a gas bar situated on a reserve. Marc is not entitled to an exemption from the indirect excise duty and tax that may be passed on to him in the retail price. However, by presenting his Certificate of Indian Status to the merchant, Marc will not have to pay GST/HST on these goods.
On-reserve manufacturers
The Indian Act tax exemption does not exempt an on-reserve manufacturer from remitting excise tax or duty on tobacco, fuel, and other products.
Goods and services tax/Harmonized sales tax (GST/HST)
The same rules apply to the 15% HST on goods and services sold in Nova Scotia, New Brunswick, and Newfoundland and Labrador as apply to the 7% GST on goods and services sold in the rest of Canada.
For information about First Nations taxes, see our guide called First Nations Tax (FNT).
General guidelines
The GST/HST does not apply to goods bought on a reserve by Indians, Indian bands, and unincorporated band-empowered entities.
Goods bought off a reserve by Indians, Indian bands, and unincorporated band-empowered entities are subject to GST/HST, unless the goods are delivered to a reserve by the vendor or the vendor's agent.
The exemption under section 87 of the Indian Act does not apply when an Indian, an Indian band, or a band-empowered entity buyer takes possession of goods off a reserve and self-delivers the goods to the reserve. However, we may waive the delivery requirement for qualifying remote stores that deal mainly with customers who are Indians, Indian bands, and band-empowered entities.
Incorporated band-empowered entities are not entitled to tax relief on goods bought on a reserve or delivered to a reserve unless the goods are purchased for band management activities.
Services
Generally, the GST/HST does not apply to services provided to Indians if the services are performed totally on a reserve (such as haircuts or small appliance repairs), or if the services are performed off a reserve and relate to real property interests located on a reserve.
Services acquired on or off a reserve by Indian bands or band-empowered entities for band management activities or for real property on a reserve are not subject to GST/HST. Exception: Indian bands or band-empowered entities will pay the tax on off-reserve purchases of transportation, short-term accommodation, meals and entertainment. However, a General Rebate application may be filed to recover the GST/HST paid on these purchases when acquired for band management activities or for real property located on reserve.
GST/HST on goods imported by Indians
The exemption under section 87 of the Indian Act does not apply to goods imported by Indians. We collect GST/HST on goods when they are imported, and as an Indian you have to pay GST/HST on the goods you import unless some other provision exempts them from tax. The goods are subject to GST/HST even when they are delivered to a reserve by the vendor's agent or Canada Post.
Administrative requirements
Buyer
To buy goods or services without paying GST/HST, you have to show the vendor proof that you are registered under the Indian Act (e.g., your Certificate of Indian Status).
Vendor
As a vendor, you have to keep adequate evidence that the sale was made to an Indian and, if applicable, delivered to a reserve. For instance, on the sales invoice you should write the registry number or band name and family number from the Certificate of Indian Status. You should also keep proof of delivery to a reserve, such as a waybill, postal receipt, freight bill, dispatch record, or mileage log.
Refund of GST/HST
When an Indian is incorrectly charged GST/HST, he or she is entitled to a refund under the general rebate program. For example, if you are an Indian and you paid GST/HST on property that you acquired off a reserve and that was delivered to the reserve by the vendor or the vendor's agent, you were incorrectly charged. To apply for a refund of the GST/HST you paid, complete Form GST189. You will have to provide proper documents to support your claim.
Sales to non-Indians
The exemption under section 87 of the Indian Act does not apply to sales or supplies made to non-Indians on a reserve. All businesses operating on reserves have to meet the general registration requirements for GST/HST, and collect and remit GST/HST on the taxable sales they make to any person who is not an Indian.
For more information, see Technical Information Bulletin B-039R, GST Administrative Policy: Application of GST to Indians.
Example 1
Joseph is an Indian who lives in Hamilton, Ontario. He buys a computer from a dealer located on a reserve in Ontario and takes the computer back to his home in his own automobile. Even though Joseph lives off a reserve, he does not have to pay GST on the computer since he bought it on a reserve. After a sale, the place where the goods are used or consumed is not relevant.
Example 2
Nancy is an Indian who lives on a reserve in Nova Scotia. She buys a washing machine from a dealer located off the reserve, in Halifax. She arranged with the dealer to have the machine delivered to her. She does not have to pay HST because of the delivery rule.
If you need help, call us toll free at 1-800-959-5525.
Glossary
Indian - This is defined in the Indian Act as a person who is registered as an Indian or is entitled to be registered as an Indian. Determining whether a person is entitled to be registered as an Indian is a question of fact. To grant tax benefits to you as an Indian, we need confirmation of your entitlement from Indian and Northern Affairs Canada.
Reserve - This has the meaning assigned by the Indian Act. To find out if a tract of land is a reserve under the Act, contact your band office. If your band does not have the answer, contact Indian and Northern Affairs Canada.
Vendor's agent - This includes any person (i.e., an individual, a partnership, or a corporation) under contract with the vendor to act as the vendor's agent for making deliveries. It is a question of fact and law whether a person is acting as an agent. A vendor must be able to demonstrate that the required contractual arrangement exists between him or her and the person who is delivering the goods.
Providing delivery services may be considered to be a taxable supply in the course of commercial activities in Canada. In this case, the person making deliveries as an agent of the vendor may have to register for GST/HST, as well as to charge, report, and remit the tax.
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Date modified: 2006-03-23 |
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